Challenges foreseen for hospital, medical construction work

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It seems to be that construction work in the health care and medical fields will continue to be an area of high activity, but there are challenges ahead, according to health care, design and construction executives at a recent roundtable discussion held at The Daily Transcript and sponsored by Pacific Building Group.

“A couple of our larger clients Sharp [HealthCare] and Scripps [Health] are both giving us indications that their workload will continue at a pretty brisk pace in the next couple years,” said Jim Roherty, president of the Pacific Building Group.

Health care providers like Palomar Health, Sharp HealthCare and Scripps Health have five-year capital improvement plans to help them direct what facilities need to be improved and if a new medical office or hospital is needed.

“If you looked at the last five years, you would see on average … we are committing about $600 million to projects, and that is continuing,” said Pat Nemeth, vice president of facilities for Sharp HealthCare.

She added that at least half of that money goes toward smaller projects and maintaining existing facilities by replacing old equipment and technology. She also said Sharp is “vigorously looking at our campuses at the potential for growth and the potential for adding beds.”

Michael Shanahan, director of facilities planning and development for Palomar Health, said now that their new hospital is complete, focus will turn to the downtown Escondido facility, which will now provide care for women and children, as well as behavioral health and rehabilitation services.

Approximately $4 million of improvements are needed to the existing medical center, including expanding the acute rehabilitation and mental health departments. Funding for this work has not been approved yet.

“We’ll meet with our board next month and look at a new five-year capital plan,” Shanahan said.

Over the next seven years in La Jolla, Randy Leopold, director of health care architecture services for University of California, San Diego, said they will be tied up in amassing the $700 million UCSD Jacobs Medical Center.

“There are budget problems on this job [right now] and they are looking to shelve things,” Leopold said. “Part of the exercise is pulling things out that literally [are not] necessary within that type of critical care setting.” He added that support buildings like medical offices can be built for half the cost on the school’s campus and not within the new medical center.

Leopold is alluding to the rising cost of medical facilities.

Shanahan said it cost roughly $850 per square foot to construct Palomar Health’s new hospital, and when you add the cost of equipment the cost increases to $1,100 per square foot to build the hospital.

“It’s very expensive to build in California … and our [current] economic climate,” Shanahan said. “It’s just the reality.”

Nemeth said that there needs to be more dialogue with medical staff and patients on ways to get rid of congested space at existing facilities so that new buildings are designed more efficiently.

“Sometimes it’s paper. Sometimes it’s where things are stored,” she said, adding that space can also be saved if medical staff looked at the hospital and their floors as more of a community, rather than each department as its own country and not share goods and supplies.

Nemeth also said there is still redundant cost in the construction of health care facilities, even with the strides the industry has taken in embracing building information modeling and alternative delivery methods, like design-build.

She explained that one area of waste is sinks for hand washing — just because the building code requires a certain number of sinks doesn’t mean it can’t be looked at or changed.

“You can’t just say ‘the building code says’ because we write the darn thing,” Nemeth said. “It’s our leaders from our industry who come up with these ideas and then [place] them into the building code.

“You really need to stand back, and every contractor, every subcontractor has to look at this industry and say, 'Construction costs have to come down. How can I lead as an innovator to identify my subcomponent, and how I can do it in a more cost-effective way?' We should be able to push construction cost into the $500-per-square-foot range.”

Roherty, whose construction firm company has vast experience building for health care providers, said, “If we can reduce the time of construction, we can reduce cost.” And that design-build method of delivery helps in reducing construction time by placing more time and emphasis in the design phase where potential problems can be identified using building information modeling.

Mark Toothacre, president of Pacific Medical Buildings, said that if a builder and developer is working with a trustworthy owner where there is a relationship already established or the owner has a good reputation of not placing unnecessary change order; health care providers are going to get a better price.

“We work with an open book with our clients to gain trust, and a design-build methodology creates a team and a goal for that trust,” Toothacre said.

Phillip Soule III, principal at NTD Architecture, said, “It used to be so much more combative a decade ago. It’s better but there is still a ways to go.”

Another challenge in construction health care is finding quality workers, which also drives cost.

Leopold said, “It’s rough finding general contractors that will want to take the high risk of medical work construction. Welders or plumbers would rather work on a high-rise building.”

For Palomar Health’s new hospital in Escondido, Shanahan said curtain walls had to come prefabricated from China, because the skilled work force was not here in California, nor throughout the United States.

Roundtable Participants

Randy Leopold, Director of Health Care Architectural Services, University of California, San Diego